About 300 supporters of Shiite cleric Muqtada al-Sadr have been killed in Najaf, Iraq, in two days of fighting, a spokesman for the US 11th Marine Expeditionary Unit in Baghdad, Lieutenant Colonel Gary Johnston, said on Friday.

Al-Sadr's Mehdi Army disputed the figure and said that 36 fighters had been killed and 70 wounded.

US officials said that at least two American troops were killed and a US helicopter had been shot down, injuring two.

The two sides blame each other for starting the latest outbreak of fighting.

The latest violence in Najaf is being described as the worst there since June's truce agreement, which ended a two-month uprising by the Mehdi Army against the coalition across central and southern Iraq.

CNN quoted Scott Baldauf, a reporter for The Christian Science Monitor who was in Najaf on Thursday, as saying that electric and water supplies to the city had been cut off.

Dozens of civilians were among the casualties, he added.

"What we did see were civilian casualties at the main hospital in Najaf," Baldauf said. "Many of them had suffered bullet shot wounds and shrapnel as well."

Najaf Governor Adnan al-Zorfi issued an ultimatum to the fighters to leave the city in 24 hours. "There is no compromise or room for another truce," he said.